Abbott (NYSE:ABT) said today that it offered to pay a 37% premium for St. Jude Medical (NYSE:STJ) in a $25 billion deal aimed at expanding its cardiac and neurological businesses.
Each unit in the $85-per-share deal consists of $46.75 in cash and 0.8708 ABT shares; at Abbott’s 5-day volume weighted average share price of $43.93 as of April 26, the buyout is worth about $25 billion.
That’s a 37% premium on yesterday’s closing price of $61.97 for STJ shares; the stock was up 27.1% to $78.76 in pre-market trading this morning. ABT shares were down -5.5% to $41.45.
The companies said the union will create a “best-in-class” competitor in nearly all segments of the cardiovascular market with the 1st or 2nd position “across large and high-growth cardiovascular device markets” with combined annual sales of about $8.7 billion. The deal also calls for Abbott to assume or refinance St. Jude’s $5.7 billion in net debt.